I Stopped Looking for the Perfect Strategy. Here’s What I Do Instead.
I Stopped Looking for the Perfect Strategy. Here’s What I Do Instead.
When I started trading I was looking for one thing: the strategy. The one setup that works on every chart, in every month, forever. I lost money as a manual trader for a long time looking for it.
Having now been at this for four years and having taken up systematic trading, I am pretty convinced it is non existent. Even the best strategies that I have tested experience periods of either being flat or going down. Trend trading struggles in a range environment while range trading is crushed by trends. Session trading becomes stagnant in a stagnant session.
And thus, I reformulated the question. Now, I don’t ask about “which approach is always successful?”, but “which approaches are not successful at particular times?”
Why that question matters
Consider two trading systems that yield equal profits over the period of a year. The first scenario implies that both systems experience losses in March. Running such trading systems together would provide you with a greater loss in March. The second scenario implies losses for one system in March and for another one in August. Running both systems together would cover the weak period of each system, yet the total profit would be equal to the profit earned in the first scenario. However, a more stable process is what allows traders to continue their activities in difficult periods.
You don’t need every strategy to be brilliant. You need each one to have a real edge, and you need them to be different from each other.
What makes two strategies actually different
Using different indicators is not enough. Two strategies built on different indicators can still take the same trades on the same days. When I build a portfolio, I look for differences in three places:
- Different hours. A strategy that trades the European morning and one that trades the US afternoon react to different news, different participants and different liquidity.
- Different timeframes. A 5 minute rule and a 1 hour rule on the same market see very different things.
- Different logic. Breakouts, failed breakouts, volatility filters, relative strength against another market. Rules that trigger for different reasons.
How to check this with your own EAs
You don’t need any special software:
- Run them together in the Strategy Tester on one account. Compare the combined drawdown with each EA’s drawdown on its own. If the combined drawdown is barely smaller than the sum, they’re doing the same thing.
- Compare their losing months. Write down the worst three months of each EA. If they’re the same months, you’re not diversified.
- Check the overlap. Look at how often they hold positions at the same time, in the same direction. A lot of overlap means one risk wearing two names.
What I built because of this
This idea is the whole design behind SIGMA EA, my gold EA. Instead of one strategy on XAUUSD, it runs 14 independent ones from a single chart. They’re spread across two sessions (the European midday and the US afternoon) and four timeframes (M5, M15, M30 and H1), and each has its own entry rule, stop and target. Because 14 strategies on one account also means 14 chances to stack risk, the protection works at the portfolio level: a daily loss stop, a cap on the total loss if every open stop were hit, a margin-level floor, a price-shock test and a pause around high-impact news.
You can find it on my profile if you want to see what this looks like in practice. But even if you never use it, try the three checks above on the EAs you already run. In my experience, the hidden overlap is where most portfolios break.
Trading involves risk. Backtests and past results do not guarantee future performance.
